Balancing Reliability and Affordability
By J.D. Wallace
While midnight on April 5 in Arizona Generation and Transmission Cooperatives’ Energy Management Services dispatch might have looked like any other, a big change occurred to how electricity is bought and sold for its members.
AzGT officially joined the California Independent System Operator’s Western Energy Imbalance Market. The WEIM is an advanced energy market that finds lowcost energy to serve real-time consumer demand across the West.
While the move doesn’t affect members at the end of the line, the transition ensures more price stability and electric reliability during times of high demand.
AzGT’s electric generation and transmission cooperative, Arizona Electric Power Cooperative—which supplies power to distribution cooperatives in Arizona and California—led the planning and implementation of the WEIM.
“We’re excited to be a part of CAISO’s energy imbalance market,” says Arizona Electric Power Cooperative Executive Vice President and CEO Patrick Ledger. “The WEIM will not only provide cost savings to our member-owners because of its optimized footprint, but it will also help ensure grid reliability and the integration of renewable resources.”
This partnership opens AzGT to a robust energy market. More than 75% of the Western Interconnection—the bulk power system connecting the Western United States and Canada—is now participating in the WEIM. Until now, AzGT remained in a bilateral market where it bought and sold power with other utilities. This market provided fewer power generation options during high electricity demand, such as hot summer days when high demand for electricity stretches across the West.
The WEIM balances electric load and generation resources every 5 minutes over a larger area. This vast area allows the WEIM to cover the larger, short-term balancing needs created by intermittent resources—such as solar and wind—that a smaller market would struggle to cover.
Access to more power generation resources helps AzGT utilize the most cost-effective power resource.
“For example, during the day when the sun is out, solar resources will be cheaper than running gas and coal units,” says Amber Parker, project manager for AzGT. “The market will see the price difference and back down the expensive resources, and the WEIM members will be able to purchase the cheaper, renewable option. The same can be said at night. When the sun goes down and solar is no longer an option, gas and coal units will be dispatched up and be sold into the market.”
The switch in early April was the result of several years of preparation by AEPCO and its balancing authority, the Western Area Power Administration’s Desert Southwest region.
A balancing authority ensures, in real time, that power system demand and supply are finely balanced. This balance is needed to maintain the safe and reliable operation of the power system. If demand and supply fall out of balance, local or even wide-area blackouts can result.
The partnership with WAPA DSW helped AEPCO upgrade its primary trading schedule from an hourly basis to 5-minute increments, which provides more power buying opportunities and flexibility that benefits members.
“WEIM will economically dispatch the lowest cost resource in real-time while backing down expensive resources, which not only optimizes the market but those savings will flow to our members,” Amber says.
The transition into the WEIM started in 2016 with the commencement of the AEPCO Beacon Project, an extensive economic dispatch, modeling, market and planning effort that evaluated the impacts of joining CAISO or another energy market. This led to AEPCO joining a multi-year effort with other neighboring utilities in the Southwest Markets Alternative Group to evaluate a variety of regional energy markets.
Following these regional efforts, WAPA DSW and AEPCO partnered to conduct a focused study that found joining the CAISO WEIM was more advantageous for both entities than other neighboring energy markets. WAPA DSW and AEPCO agreed to join the CAISO WEIM in 2021.
“Today was the culmination of more than six years of researching, planning, testing and implementation,” Patrick said on April 5. “But the road to this energy transition does not stop here. We commend all of the WAPA and AEPCO personnel for their incredible contributions to this implementation and for continuing to demonstrate the value of our partnership as we move forward into the future.”
AEPCO is evaluating additional market opportunities, including CAISO’s Extended Day Ahead Market and Southwest Power Pool’s Markets+ initiative.